Robert Blechman and Cathy Blechman Chermak v. Estate of Bertram Blechman, 160 So. 3d 152

Bertram Blechman (Decedent) owned a 50% membership interest in Laura Investments, LLC, formed in New Jersey with an operating agreement that defined "Membership Interest" to include distribution, allocation, information, and voting rights.
The Agreement limited transfers: Section 6 required written consent except for transfers to "Immediate Family" (defined as living children and issue).
An April 30, 2010 amendment to Section 6.3(a) provided a default: unless one of three specified transfer methods occurred, the deceased member’s membership interest "shall pass to and immediately vest" in the deceased’s then-living children per stirpes.
Decedent died Feb. 25, 2011, having amended his revocable trust in Aug. 2010 to give his girlfriend, Arlene Roogow, a life interest in the residence and $5,000 monthly distributions from one-half of LLC distributions; residuals to his children via the trust.
The personal representative listed the 50% LLC interest as an estate asset; Roogow sought distribution under the trust amendment. The trial court ruled the LLC interest was part of the probate estate.
On appeal, the children argued the Agreement’s default clause vested the membership interest in them at death, removing it from probate; the Fourth DCA applied New Jersey law and reversed, holding the interest vested in the children immediately at death.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Decedent's LLC membership interest was part of his probate estate or vested outside probate at death under the operating agreement	Blechman children: the Agreement's default in §6.3(a) was triggered and the membership interest "immediately vested" in the Decedent's children at death, so it was not estate property	Estate/Roogow: the Decedent owned the 50% interest at death and satisfied §6.3(a)(ii) by bequeathing the interest via his will/trust to family (residual beneficiaries), so it remained probate property	Reversed trial court: under New Jersey law and the Agreement's plain language, because the Decedent bequeathed the interest to a non-immediate-family beneficiary (Roogow) the default clause applied and the membership interest vested in the children at death, taking it out of probate

Berkowitz v. Delaire Country Club, Inc., 126 So. 3d 1215 (Fla. 4th DCA 2012) (operating agreements are construed like contracts)
Chipman v. Chipman, 975 So. 2d 603 (Fla. 4th DCA 2008) (contract interpretation reviewed de novo)
SPCA Wildlife Care Ctr. v. Abraham, 75 So. 3d 1271 (Fla. 4th DCA 2011) (standards for de novo review of instrument interpretation)
Timmons v. Ingrahm, 36 So. 3d 861 (Fla. 5th DCA 2010) (interpretation of wills reviewed de novo)
Michaels v. Donato, 67 A.2d 911 (N.J. Super. Ct. Ch. Div. 1949) (contracts can create enforceable property transfers effective at promisor's death)
Minoff v. Margetts, 81 A.2d 369 (N.J. Super. Ct. App. Div. 1951) (partnership agreement controlled transfer of decedent's partnership interest)
Kuhn v. Tumminelli, 841 A.2d 496 (N.J. Super. Ct. App. Div. 2004) (New Jersey LLC Act and operating agreements afford flexibility and freedom of contract)
Bower v. The Estaugh, 369 A.2d 20 (N.J. Super. Ct. App. Div. 1977) (contractual transfers on death are not testamentary when supported by consideration)
Murray Van & Storage, Inc. v. Murray, 364 So. 2d 68 (Fla. 4th DCA 1978) (contractual buy-sell restrictions can supersede testamentary dispositions)
In re Estate of Corbitt, 454 S.E.2d 129 (Ga. Ct. App. 1995) (invalid bequest does not invalidate the will; devise to a particular person may be void while probate stands)